Disgraced Shipbuilder Gets Contract to Build More Ships

Bollinger Shipyards was awarded a contract to build 26 Coast Guard cutters. The estimated value of the contract is $1.7 billion. The contract award comes just five months after the company paid $8.5 million to settle False Claims Act claims alleging the company misstated the strength of previous cutters. That error caused several boats to buckle while at sea.

How can a company that just settled claims that it engineered and built unseaworthy boats get a contract to build even more? Great question!

America’s defense contractors are very limited in number. There are only a handful of companies capable of manufacturing combat ships and airplanes. Boeing, for example, has been the subject of approximately ten False Claims Act cases. It keeps getting contracts, however, because it is the only American company with the infrastructure to build air tankers and cargo planes.

The lack of competition allows many of the companies to play a sort of “cat and mouse” game with the defense department and homeland security. Contractors will frequently overcharge or cut corners. When (and if) caught, they simply pay a fine and continue in business. No one ever seems to go to jail.

Often contractors don’t even get caught. Bollinger found itself on the receiving end of a False Claims Act complaint, however, after several Coast Guard cutters buckled while in heavy seas.

The story of the defective ships is quite disconcerting. Bollinger was hired to reconfigure 8 existing cutters that were beginning to show signs of age. The Coast Guard wanted to extend the size of the ships from 110 feet to 123 feet in order to add more electronics. The retrofit was also supposed to add 15 years of service life.

One of the first retrofitted vessels was the USCGC Matagorda. Shortly after being refitted by Bollinger, the ship found itself in 8 to 12 foot seas. The ships hull buckled and later developed cracks and small leaks. The crew was not harmed.

Government Files False Claims Act Case Against Bollinger

After the hull failures, the Coast Guard demanded $96 million from Bollinger. That was the cost of the retrofits. When the company didn’t pay, the Justice Department brought a False Claims Act case against the company. According to the complaint, “Bollinger knowingly misled the Coast Guard to enter into a contract for the lengthening of Coast Guard cutters by falsifying data relating to the structural strength of the converted vessels. Eight Coast Guard cutters are now unseaworthy and unusable.”

The government says that senior company officials knew that increasing size of the ships might make the hull unseaworthy. The Coast Guard expressed similar concerns. At one point, the industry group American Bureau of Shipping (ABS) offered to confidentially assist Bollinger. CEO Boysie Bollinger allegedly declined the offer and sent an internal email that said,

I’m concerned that [ABS] sells CG on the fact that they need this review. . . . [ABS] would love the additional responsibility from the CG and as we both know, adverse results could cause the entire 123 to be an un-economical solution if we had to totally rebuild the hull. . . . MY CONCERN – we don’t do anything – ABS gets CG to require it without our input, and the result is we BLOW the program.

That case was settled for $8.5 million in December of last year with no admission of wrongdoing.

False Claims Act and Whistleblower Awards

The False Claims Act is a Civil War era law that allows private individuals to pursue claims against people and companies that defraud the government. If the claim is successful, the person bringing the claim can receive an award of up to 30% of whatever the government collects. In the Bollinger case, that is an award of between $1,275,000 and $2,550,000.

To qualify for an award, the person reporting the fraud must be the original source of the information. That usually means an insider although awards have been paid to outsiders depending on how they acquired the information.

Each year there are about 400 False Claims Act cases filed in the United States. That may not sound like much but these cases have helped the government collect billions of dollars for taxpayers.

Are the Awards Real?

Whistleblower awards under the False Claims Act are very real! In 2014, the Justice Department paid out over $435 million in awards. Our whistleblower clients have received over $100 million.

Collecting a Whistleblower Award

To collect an award under the False Claims Act, the whistleblower must retain counsel and file a sealed or “secret” lawsuit in federal court. The case remains secret while being investigated by the government. Ultimately the government can intervene and take over the lawsuit or allow the whistleblower and his or her lawyer to pursue the case.

Lawyers that specialize or concentrate in these type of cases typically take the case on a contingent fee basis. That means you don’t pay any legal fees or costs unless there is a recovery.

Why Choose the Whistleblower Lawyers at MahanyLaw?

Big defense contractors get away with fraud every single day. The fraud isn’t caused by the hard working men and women that work at these companies. Instead responsibility almost always lands on senior management. These are the guilty ones hoping to hide defects or bilk taxpayers.

Whistleblowers are the true American heroes – folks who have the strength and courage to stand out and make a difference. It is often billing clerks, engineers and rank and file workers that step forward and report the fraud. Many line workers don’t think they have the power to take on big corporations. The False Claims Act and a great legal team can tilt the odds in favor of the whistleblowers, however.

We are proud to represent whistleblowers and have the experience necessary to protect workers from retaliation and obtain the largest awards. Founder Brian Mahany is one of a few American lawyers with billion dollar case experience. (Billions in settlements and wins quite recently). Our brand power causes opponents to take our clients very seriously.

Because we believe in what we do, we treat our whistleblower clients like family. You speak with an experienced lawyer rather than being shuffled to a staff member or inexperienced attorney.

Ready to make a difference or just want more information? Call us! Attorney Brian Mahany can be reached directly at *protected email* or by telephone at (414) 704-6731. All inquiries are protected by the attorney – client privilege and kept strictly confidential.